Freight forwarders: who are they and what do they do?

The role of freight forwarders in international shipping

Are you importing goods from China or elsewhere in Asia to Europe? Or exporting to South America? Chances are you’ll need the services of a freight forwarder. But what exactly does a freight forwarder do, how do they differ from other logistics providers, and what should you consider when working with one? Here’s everything you need to know about freight forwarders and their role in global logistics.

What is a freight forwarder?

A freight forwarder is a logistics expert who can organize the entire transport process on your behalf. International shipping can be complex due to customs formalities, import duties, and the coordination of multiple transport modes like road, sea, rail, and air freight. A freight forwarder takes care of these aspects, saving you time and effort.

The freight forwarding industry in the Netherlands is substantial. According to ABN AMRO, 255 forwarders were operating in the country in 2012. The sector contributes nearly €60 billion annually, accounting for around 10% of the global market.

Challenges for shippers

The abundance of logistics providers locally and globally can make it difficult to choose the right partner. Freight forwarders in the Netherlands compete with providers from origin countries, such as China, which adds another layer of complexity.

Specialization is key

Each forwarder has a niche. For example, a Rotterdam-based forwarder with an operations hub in Shenzhen may offer competitive rates for less-than-container load (LCL) shipments from that region. Their local expertise and partnerships with agents, ports, carriers, and transport companies make them both cost-effective and reliable.

Working with a specialized forwarder ensures you get the best price and service tailored to your specific needs, whether you're shipping from Vietnam, India, or Taiwan, or handling large, urgent shipments versus smaller, slower ones.

A traditional market

The freight forwarding market is often opaque and outdated. Many websites offer limited information, pricing structures are unclear, and quotes can be difficult to understand. This makes finding the right partner both time-consuming and expensive. Platforms like Cargoplot simplify the process by matching shippers with the most suitable forwarders for their specific needs.

Freight forwarder vs. Carrier

A freight forwarder is not a carrier. While carriers are responsible for the physical transportation of goods, such as trucking shipments from the Rotterdam port to a warehouse, freight forwarders act as intermediaries who coordinate these services.

Why does this distinction matter?

Carriers: Are responsible for loss or damage during transport.
Freight Forwarders: Are accountable for organizing the shipment but not for its physical execution. However, forwarders ensure quality by partnering with reliable carriers.

How to work with a freight forwarder

Freight forwarders can manage the entire shipping process or just part of it. Key steps include:

Coordination with your supplier: Define terms for the delivery of goods and who bears the responsibility.
Using incoterms: Internationally recognized trade terms clarify responsibilities between buyers and sellers.
Finding the right forwarder: Platforms like Cargoplot can help identify the best partner for your specific shipment.

Common problems and scams

While most shipments go smoothly, there are potential pitfalls to watch out for:

1. Incorrect information

Errors in weight or dimensions can lead to unexpected costs, such as additional pallet charges.

2. Misuse of incoterms like DDP

Delivered Duty Paid (DDP) is often misapplied. In some cases, Chinese agents handle logistics under DDP terms, but the documentation and reliability can be subpar, leading to delays and complications.

3. Hidden costs with certain incoterms

Incoterms like CIF, DAT, DAP, and CPT can sometimes result in unexpectedly high costs at the destination port due to unclear or incomplete arrangements.

Conclusion

Freight forwarders are essential to global trade, but choosing the right one can be challenging. Platforms like Cargoplot simplify the process, helping you find reliable, cost-effective solutions tailored to your logistics needs.